New York Attorney General reaches $2 billion settlement with Genesis after claims of fraud

After a lawsuit filed by the New York Attorney General against crypto lender Genesis in late 2023, the company reached a settlement of $2 billion with the AG on Monday.

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Genesis Trading settles lawsuit with New York AG

In an X post on Monday, New York Attorney General Letitia James announced that her office has secured a $2 billion settlement with bankrupt cryptocurrency firm Genesis Global. The settlement was made to compensate investors who she claimed were lied to and defrauded by the company.

AG Letitia James sued the company in October 2023 on accounts of lying and defrauding investors of over $1 billion. This was alongside a lawsuit against DCGco, claiming that the companies had defrauded 230,000 investors through the Gemini Earn investment platform, being an unregulated crypto industry.

This began after Genesis filed for Chapter 11 bankruptcy earlier in 2023 and froze withdrawal options for its customers on the platform. The company only received court approval last week to refund its customers $3 billion of cash and cryptocurrency.

The settlement with Genesis is the largest settlement against a crypto company in New York history. "This historic settlement is a major step toward ensuring the victims who invested in Genesis have a semblance of justice," said AG Letitia James.

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"Once again, we see the real-world consequences and detrimental losses that can happen because of a lack of oversight and regulation within the cryptocurrency industry," she added.

The settlement further required bankruptcy court approval and will create a "Victim's Fund" for defrauded investors. Additionally, Genesis is banned from operating in New York.